Becker's ASC Review

6 ency in patient care and pricing of procedures will continue, says Deb Yoder, RN, MHA, vice president of clinical services at Surgical Management Professionals. e more positive information patients have about cost savings and quality, the more likely they will be to choose an ASC rather than a hospital. 3. Hospital employment of primary care physicians and spe- cialists. Increasing hospital employment of physicians will result in referral pattern shis. Mr. Mathis suggests partnering with health plans to design and implement a reimbursement strategy that encourages physicians, both primary care and specialists, to remain independent. SCA has worked with numerous health plans to implement contracts that truly place a value on high quality, efficient care. 4. Increasing payroll costs. ASCs can keep payroll costs in check by ensuring that the costs are justified and reasonable in accordance with the region. Keep an eye on staffing ratios to make sure they are appropriate for the work done at the facility. "Payroll costs related to human capital is justified, but should not be allowed to run rampant," Ms. Yoder says. "One needs to understand where the ex- penses are and why the expenses are occurring." 5. Changes in state provider taxes and worker's compensa- tion. Tax and regulation changes can come down the pike at any time. In January, e New York State Workers' Compensation Board adopted a new ambulatory fee schedule. e new schedule changes reimbursement method- ology. Some providers are afraid that this will mean cuts to pain management reimbursement and reductions in orthopedic surgeon reimbursement rates. Connecticut was one of several states to introduce a provider tax on ASCs in 2015. e tax is set at 6 percent of revenue which will have a material impact on the earnings of ASCs across the state. ASCs can organize efforts through the Ambulatory Surgery Center Association and state-level ASC associations to ensure that their message is heard in an organized and impactful way, says Mr. Mathis. 6. Spike in supply costs. Coming into the New Year, vendors may be look- ing to increase implant prices. Additionally, ASCs adding new technology for current or proposed service lines may face high supply costs. To keep these costs low, Ms. Yoder suggests reviewing the center's 20 costliest items to ensure they are contracted at an appropriate rate for the region the facility is in. 7. Vendor negotiations. Vendors come to negotiations experienced and with background research. "Good negotiation cannot be done without homework completed," says Ms. Yoder. "One cannot go to the table unless one has a good understanding of products used, volumes, surgeon buy-in and support as well as alternative options. Vendors need to understand that if they cannot meet best pricing, surgeons may look to alternative options. e vendors will do their homework and we need to do ours." Go into the negotiations with a strong understanding of service contracts and buried expenses. Vendors may lower capital costs, implant and dispos- able costs, but raise service contracts in the fine print. 8. Proving the quality and value of ASCs. Proving value requires a tremendous amount of resources to educate primary care physicians and health plans about the quality and value of ASC surgeons and our ASCs. "is requires tracking quality metrics and being able to translate your costs into how much money is being saved for patients and payers," Mr. Mathis says. 9. Effective surgeon engagement. Surgeons have many options for where they can perform cases. Keep track of the actual number of cases performed versus the ex- pected number of cases. If a feasibility study was completed showing that 40 orthopedic cases can be performed in a month, and in reality only 10 are performed on average, the bottom line will suf- fer. Keeping surgeons engaged is key to en- sure case volume doesn't dip below the expected amount. "Keep the volume trans- parent to the investors, but also ensure that the numbers are real and will be completed," Ms. Yoder says. "e 'if you build it, they will come' mentality doesn't always hold true." 10. Distractions from providing high-quality patient care. Sometimes, ASCs overly focus on reduc- ing expenses. It's always important to manage expenses, but also focus on aligning your ASC and physicians with the community for the long term. "When well-positioned in their markets, ASCs can play a pivotal role in achieving the triple aim for healthcare, which is, improving patient experi- ence, improving population health and reducing costs," Mr. Mathis says. n 10 Biggest Challenges to ASC Profitability in 2016 (continued from cover) Brian Mathis Deb Yoder For more information, visit www.beckersspine.com or call (800) 417-2035. June 9-11, 2016 • Swissôtel - Chicago, Illinois Becker's 14th Annual Spine, Orthopedic & Pain Management-Driven ASC Conference + The Future of Spine Keynote Speakers: Lou Holtz & Tucker Carlson SAVE THE DATE

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